By PAUL PRESTON; Paul Preston, the director of the Center for Contemporary Spanish Studies at the University of London, is the author of ''The Spanish Civil War 1936-39.''

Published: December 27, 1987

GEN. FRANCISCO FRANCO won a bloody civil war with the aid of Hitler and Mussolini, and then built a regime that subjected his democratic and leftist enemies to forced labor camps, mass exile, prisons, torture and executions. However, while the Fuhrer died in the bunker and the Duce was shot, their crimes fresh in the popular mind, Franco died in bed, a feeble grandfather figure. By surviving beyond World War II, he gave his propagandists time to replace his Axis connections with an image as the cold war's ''Sentinel of the West.'' In the 1950's, his somewhat modified regime was courted by the United States for strategic reasons and by international investors for economic ones. Planeloads of tourists and breakneck economic modernization helped wipe away the fascist connotations of his regime. By the 70's, even as his opponents were still subject to police terror and execution, he was being successfully presented as the benevolent father of his people.

Franco became an army major when Woodrow Wilson was in the White House. He lived well into the era of space travel and beyond the disgrace of Richard Nixon. He was the youngest general in Europe since Napoleon, renowned for reckless bravery during colonial campaigns in Africa. In later life, however, he was to prove himself in both war and politics a model of slow-moving caution. As both soldier and dictator, he seemed to some to be deadeningly mediocre, to others a brilliant Machiavellian. The 40 years of his regime and the 83 of his life were riddled with contradictions. Mountains of books have been written about the caudillo and his dictatorship, yet he remains an enigma.

With the publication of Stanley G. Payne's massive and eminently judicious study we at last have the means of understanding the man and his regime. America's most prolific historian of Spain has produced what must surely become the standard work on this subject. He has placed the Franco regime in a comparative context which ranges from Latin America through Greece and Finland to Eastern Europe. More important, he has produced a rounded and empathetic portrait of the portly and taciturn dictator. I do not agree with some of his judgments, particularly on the social costs of the regime, but I regard ''The Franco Regime'' as the most solidly based and sanely balanced book yet to appear on this difficult subject. It reflects a lifetime's reading and thinking. It is to be hoped that its careful attempts at an objective narrative do not deprive it of the general readership it deserves.

The biggest mystery of all is how Franco survived, and especially how he survived his links with the Axis. At the end of the civil war, his victory parade through Madrid was headed by Italian Black Shirts and the rear was brought up by Hitler's Condor Legion. Sympathy for the Axis cause in the war, although never translated into outright belligerence against the Allies, earned Franco the hostility of many Western democrats, and not just those of the left. In the last resort, as Mr. Payne demonstrates admirably, Franco did not join Hitler only because the Fuhrer could not pay his price. The myth of Franco's astute diplomacy is devastatingly demolished here. The caudillo failed totally to understand the significance of American entry into the war. Refueling and other facilities in Spain continued to be made available to the German and Italian navies, intelligence assistance freely given and, until mid-1944, invaluable exports of tungsten sent to Germany.

After the war, incessant propaganda presented Franco as the architect of ''the long years of peace.'' In fact, the civil war continued to traumatize Spanish life long after the end of formal hostilities. April 1939 did not see the beginnings of peace or reconciliation but of institutionalized vengeance against the defeated left. Until Franco's death, Spain was governed as if it were a country occupied by a victorious foreign army. The training, deployment and structure of the Spanish Army prepared it for action against Spaniards rather than any external enemy. In the summer of 1939, executions were being still carried out by the hundreds every week. The killings went on well into the 40's. Political prisoners numbered hundreds of thousands and were formed into ''penal detachments'' and ''labor battalions'' to be used in the construction of dams, bridges and irrigation canals. Many were hired out to private firms for work in construction and mining; 20,000 were employed in the construction of the Valley of the Fallen, the gigantic mausoleum for Franco.

Franco worked harder than anyone to keep the war a festering issue. Memories of the war and of the bloody repression that followed it were carefully nurtured in order to keep together the uneasy Francoist coalition. Mr. Payne is especially good at disentangling the complex rivalries between the regime's ''families'' of soldiers, prelates, landowners, industrialists, bankers and Falangists. Reminders of the war were useful to rally the wavering loyalty of any or all of these groups. A stream of government-sponsored books, pamphlets and magazines, many aimed at children, glorified the heroism of the victors and portrayed the vanquished as the dupes of Moscow, the blood-crazed perpetrators of sadistic atrocities. Political indoctrination courses were compulsory for all schoolchildren.